Republicans Propose Subsidies, Tax Credits for Health Care

After six month of work, a 12-member panel of Senate Republicans proposed a wide range of tax credits, subsidies and discounts to provide and improve health insurance for millions of Americans.

In contrast to Democratic proposals that would increasingly nationalize the health care system, the Republican plan calls for more flexibility and greater choice. Senate Republicans endorsed a proposal by President Bush to provide tax credits to help low-income workers buy insurance on their own if coverage is not available from their employers. It is estimated the plan would help at least 5 million of the nation's uninsured.

In addition, their proposals included:

Tax deductions of up to $20,000 for medical specialists who provide charity care to patients referred by community health centers and nonprofit clinics.

Discounts to low-income people and the uninsured in order to buy prescription drugs.

Aid to colleges and universities to make health insurance available to full-time students.

In addition, the government would forgive student loans or defer interest payments if college graduates used the money to establish health savings accounts. The 12-member panel also said the government should provide malpractice insurance for doctors volunteering in community health centers.

The panel was somewhat divided, however, on Bush's proposal to let small companies band together and buy insurance through their trade associations. Some felt that such health plans would allow small businesses to pool their purchasing power and buy coverage at reduced rates, while others had concerns that it might attract only healthy people, driving up costs for those who stay in the traditional insurance market.

Source: Robert Pear, "Senate Republicans Propose Plan for Health Insurance," New York Times, May 12, 2004.